NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Global Diffusion of Ideas

Francisco J. Buera, Ezra Oberfield

NBER Working Paper No. 21844
Issued in January 2016
NBER Program(s):Economic Fluctuations and Growth

We provide a tractable theory of innovation and technology diffusion to explore the role of international trade in the process of development. We model innovation and diffusion as a process involving the combination of new ideas with insights from other industries or countries. We provide conditions under which each country's equilibrium frontier of knowledge converges to a Frechet distribution, and derive a system of differential equations describing the evolution of the scale parameters of these distributions, i.e., countries' stocks of knowledge. In particular, the growth of a country's stock of knowledge depends only on its trade shares and the stocks of knowledge of its trading partners. We use the framework to quantify the contribution of bilateral trade costs to cross-sectional TFP differences, long-run changes in TFP, and individual post-war growth miracles.

download in pdf format
   (694 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w21844

Users who downloaded this paper also downloaded* these:
Alvarez, Buera, and Lucas w19667 Idea Flows, Economic Growth, and Trade
Murphy and Topel w21841 Human Capital Investment, Inequality and Economic Growth
Grossman, Helpman, Oberfield, and Sampson w21861 Balanced Growth Despite Uzawa
Jaffe and de Rassenfosse w21868 Patent Citation Data in Social Science Research: Overview and Best Practices
Farhi and Tirole w21843 Deadly Embrace: Sovereign and Financial Balance Sheets Doom Loops
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us